External influences Economy Interest rates Most businesses will need Essay example

External influences Economy Interest rates Most businesses will need Essay example

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External influences Economy Interest rates Most businesses will need
to borrow money. The interest rate will affect how much it costs.

External influences

Economy

Interest rates

Most businesses will need to borrow money. The interest rate will
affect how much it costs a business to borrow money. If the interest
rate is high the money a business owes is more than before. A 20%
interest rate rise would affect Cadbury’s; they would have to pay
extra money towards the loan. This too would affect Sainsbury's in the
same way. Any interest rates that go up will affect a business because
the business needs to make up the costs and the only way to do this is
to higher the prices of their service or products. The company might
have to borrow more money to pay for the interest rate going up.

Competition

Competition is where rival businesses aim their products at the
same customers and try to win and keep their custom. Sainsbury's main
competitors are tescos, Asda and Morrison’s. They all sell food and
household goods. Asda could sell more food than them so Sainsbury’s
would get less customers, Cadbury’s main competition is Masterfoods,
coca cola, Walkers and Rowntrees. If Cadbury in the next year didn’t
release any more chocolates or sweets and rowntrees released different
sweets even though people would still buy Cadburys old ideas they
would buy rowntrees new products. This way Cadburys would loose money
and they would loose customers buying their ...

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